Shares of GrubHub (NYSE:GRUB) have tanked today, down by 9% as of 12:30 p.m. EDT, after the company provided updates and commentary about the COVID-19 impacts it is experiencing. The popular food-delivery platform also withdrew its full-year 2020 guidance.
Grubhub expects revenue and adjusted EBITDA in the first quarter to be "slightly above the midpoints" of the outlook it provided in February. The midpoints of guidance for those metrics are $360 million in revenue and $20 million in adjusted EBITDA.
The tech company acknowledged a "swift change in customer behavior" starting in mid-March as the pandemic spread within the U.S., which resulted in a decrease in orders. The decline in orders was especially pronounced in Grubhub's corporate sales, which represented a "mid-single digit percentage of our orders in the fourth quarter," as corporate clients shifted to remote work.
Grubhub's business in New York City, now the global epicenter of the outbreak, has also been particularly hurt. Overall, Grubhub expects daily average grubs (DAGs) to be "flattish" sequentially in the first quarter.
Conditions have improved entering the second quarter as consumers are starting to resume ordering for home delivery. In some markets that are less affected, order activity is exceeding pre-COVID-19 expectations. Grubhub plans to reinvest some of its second-quarter profits in programs to support restaurant partners. Those efforts will ding adjusted EBITDA, but Grubhub notes that the program is a "completely discretionary short-term business decision designed to support our industry."
Due to ongoing uncertainties, Grubhub withdrew its full-year 2020 revenue and EBITDA guidance. The company will report first quarter earnings on May 6.